Gold and silver came under some serious selling pressure last week and thus far have not mounted a comeback. In our view, this is not a bad thing as it provides investors the opportunity to buy silver at sub-$18 per ounce levels. In our view, gold also represents an excellent long-term value at current levels for the patient investor.
For those who might be questioning what could be the next big catalyst for gold, especially since interest rates are set to rise before the end of year, we offer a few ideas:
A Deutsche Bank implosion: It’s no secret that the German investment bank has come under pressure-just look at what its stock price has done this year. Between low to negative interest rates, lawsuits and settlements and other factors, the bank has had a difficult time and remains in a very challenging position. Recently, a report of some hedge funds withdrawing some excess capital and positions from the bank fueled a stock market sell off and increasing volatility. We believe that there will be more of this to come, and without a bailout the bank is in danger of collapse.
Ongoing stimulus measures: Even if the Fed does hike rates by a quarter point in December, it does not mean that other central banks are going to follow suit. In fact, we would not be at all surprised to see further easing measures as global growth remains weak and deflation remains a threat. We would also not be at all surprised to see the U.S. Fed hike rates only to lower them again later. The Brexit saga is just getting started, and the U.K. could engage in various measures to try to keep its economy from sinking.
A massive stock market exodus: Stock valuations are very stretched in our view, and the market may have already seen the highs for some time to come. This bull market is old and getting stale quickly. The notion of higher rates could potentially spell the end of the rally, and we would not be at all surprised to see significant market declines of 20, 30 or even 40 percent or more. A massive amount of wealth could be wiped out very quickly if investors do not heed the warning signs, and that capital could find its way into perceived safe haven assets such as gold and silver.
Whatever the case may be, we don’t feel gold is likely to be down very long. In fact, we would welcome lower prices at this point as current levels are attractive and might provide a good opportunity for dollar-cost averaging.
If you already own physical metals, now may be a great time to add more to your holdings. If you don’t, now may be the ideal time to get started.
Let us show you how.
Speak with an Advantage Gold account executive today about the potential benefits of physical gold and silver. Our professionals are here to answer your questions and to make the buying process as simple and convenient as possible. We can even show you how to buy these physical metals using your IRA account.
Don’t wait for the next stock market collapse or for gold and silver prices to rise substantially from current levels. Explore your options today. Just pick up the phone and call us today at 1-800-341-8584 to get started.Tags: advantage gold, brexit, buying opportunity, deutsche bank, gold, interest rate hike, stock market collapse, weak growth